Vanilla Mechanics:
Upon a witnessed crime:
The bounty is immediately added to the crime faction.
A hivemind-like crime response is set in the immediate area depending on specific game settings like iCrimeAlarmRecDistance and iCrimeAlarmLowRecDistance.
Modified Mechanics:
Upon a witnessed crime:
The first NPC witness will try to report the crime.
What counts as a successful report depends on the setting:
If NPCs have no crime faction set, there will be no report.
Indoors, NPCs will try to reach and go through any door linked to another cell.
Outdoors, NPCs will try to flee towards the nearest guard within a set radius.
In outdoor areas lacking guards (villages or the wilderness), NPCs will flee a large distance, to simulate the process of reporting to a guard the next town over.
Because of technical limitations (only cells immediately surrounding the player are loaded), it is impossible to make NPCs travel to unloaded actors; ie Whiterun guards from Riverwood.
When the crime is successfully reported, the bounty is officially registered, and any guards that were not direct witnesses will be alerted to your location. Congratulations, you're now a wanted person!
If the reporter is killed, the crimes that they were reporting are lost.
Committing more crimes will incur more reports. Nobody said this had to be easy ya know?
Committing multiple crimes while a report is ongoing:
If any existing reporter is a witness, they will add it to the list of crimes to report.
Otherwise a new reporter is created. This can go out of hand quickly.